“When performance is measured and reported, the rate of improvement accelerates” -Thomas Monson

Performance based marketing or affiliate marketing is increasingly being used by brands as a channel to promote products, generate leads as well as create brand awareness. As brands rely heavily on digital channels of marketing, Performance Marketing has become mainstream. This can primarily be attributed to the high returns on investment offered by Performance Marketing.

Before we discuss how Performance Marketing will dictate brand success in 2019, lets delve into the basic idea of Performance Marketing. An affiliate employs varied marketing tools and tactics like Email, SMS and notifications to market a brand’s product or service. The affiliate gets its commission only when a sale is made. That is why affiliate marketing is also referred to as Performance Marketing.

Why Are Brands Using Performance Marketing?

As brands focus on ROI for their marketing spends and employ tools for measuring success, Performance Marketing is emerging as quite the star. While Performance Marketing is best used alongside traditional methods, a simple comparison with other channels shows an interesting trend.

If we compare the cost of Google ad spends (which is a common digital marketing spend) and Performance Marketing, the difference is stark. The money spent to drive a sale through Performance Marketing is generally substantially lower than that of your average Google Ad or other digital marketing channels.

Affiliates also present retailers with newer marketing opportunities. For instance, CashKaro has integrated its Cashback and Coupons technology with ICICI Pockets and JioMoney. Integrated marketing opportunities such as this one help brands leverage synergies between Performance Marketing organisations and their partners. In fact, some of the biggest names in the e-commerce domain such as Amazon, Alibaba, Expedia and Uber are investing in Performance Marketing for its cost-effective nature.

Great for Young Brands & Start-Ups

Another area where Performance Marketing stands out is for young brands and start-ups. These organisations generally do not have big marketing budgets and have limited resources. In such a scenario these brands can work with Performance Marketing companies within reasonable budgets.

Unconventional retailers and start-ups such as Teabox, Coolwinks.com, Magzter are turning to Performance Marketing companies to juice their marketing budgets to the fullest. What’s interesting is that a recent NASSCOM report, said that India is pegged as the third biggest start-up ecosystem worldwide. It is likely that most Indian start-ups will engage in performance based marketing as a part of their digital marketing spends.

Why Performance Marketing is the Future

2019 will see brands base decisions on data more than ever before. World class attribution technologies coupled with the convenience of Performance Marketing will make it a marketing necessity. According to a Blueshift study, 28 % marketers are employing AI for recommending products while 26 % marketers are using AI for campaign optimisation. Such technologies will also help performance marketers target consumers more effectively and make it even more value for money.

Performance Marketing leverages social networks such as WhatsApp, Instagram, You Tube, Facebook etc. Now, as Mobile devices become the most preferred medium for online shopping, targeting users is becoming easier through Performance Marketing channels. An interesting fact to consider here is that by 2020, mobile transactions would account for 70% of all e-commerce purchase. This in turn promises to strengthen the value added by performance marketing firms.

Brands Leveraging Influencers As Affiliates

Another major trend is the search for authenticity – consumers trust content from influencers and other consumers more than they trust brands. In fact, as per a 2016 study conducted by Twitter, about 49 % Twitter users depended on influencer reviews while making purchases. Performance Marketing firms work with prominent content publishers as well as influencers who have a sizable impact on consumers.

Moreover, Performance Marketing gives both publishers and influencers far more freedom and they get to stay true to their audiences. This relationship also has a positive effect on sales or leads that affiliates generate. Brands can combine the power of affiliate marketing to get more leads or conversions while employing the power of influencer marketing to reach a wider clientele. Hence, brands can partner with such affiliates to leverage the clout that influencers enjoy.

Besides the clearly tangible benefits of sales and transactions, Performance Marketing also helps brands educate users. A major part of Performance Marketing includes reaching out to consumers through videos, infographics, dedicated blogs etc which give brands more visibility. It is perhaps the least expensive way to gain consumer mind space without paying for it, unless it translates into an actual sale. Overall, I believe Performance Marketing is helping brands increase product recall and build more meaningful and long-term customer relationships.